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Achieving Value-Based Payment Success: Implications for IT and the CIO

January 19, 2017
by Tonya Edwards, M.D., Impact Advisors
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Executive Summary: Nine CIO thought leaders from leading healthcare organizations across the country convened on October 14, 2016 for the annual Scottsdale Institute Fall CIO Summit. What resulted was a lively discussion about the challenges today’s healthcare CIOs are facing as the scales tip ever closer to value-based payment as well as a display of steadfast resolve to meet those challenges head on with innovative strategies and cutting-edge tactics. This report highlights the key focus areas of the discussion, and suggests some key strategies for success.

CIO Summit Participants: Kyle Johnson, Eastern Maine Healthcare Systems; Ken Lawonn, Sharp HealthCare; Paul Merrywell, Mountain States Health Alliance; Patrick O’Hare, Spectrum Health; Bill Russell, former CIO, Saint Joseph Health; Pat Skarulis, Memorial Sloan Kettering Cancer Center; Bruce Smith, Advocate Health Care; Brent Snyder, Adventist Health System; Jim Veline, Avera

Organizer: Scottsdale Institute; Sponsor: Impact Advisors; Moderator: C-Suite Resources, Ralph Wakerly


National health expenditures reached $3 trillion in 2014, the last year for which we have data from CMS. This accounts for about 17.5 percent of the U.S. gross domestic product. With ever increasing pressure from the rising cost of healthcare, our federal government, especially CMS, is leading the way to try to reduce healthcare spending. Voluntary alternative payment models such as ACOs, voluntary bundling programs, pay for performance and other programs have been taking shape over the past few years. But with last year’s passage of the MACRA (Medicare Access and CHIP Reauthorization Act of 2015) legislation, the stakes have been raised.

On the hospital side, we are seeing a shift to mandatory hospital bundled payment programs. The first mandatory program, in place in 67 markets, requires hospitals to participate in a bundled payment program for hip and knee replacement surgeries. Hospitals that perform the surgery are accountable for spending associated with the ensuing “episode of care.” The next mandatory bundled payment for hospitals will be for bypass surgery and acute myocardial infarctions (heart attacks), and is proposed to begin in 98 markets in the near term.

For a decade or more health systems have been preparing for this shift, some more vigorously than others, but now that it is a reality health systems are forced to rapidly lay the groundwork for success. This new era is being marked by significant investments to optimize existing EHR functionality as well as increasing focus on exchange of data, patient engagement and analytics capabilities in order to effectively take on financial risk and manage care of a patient population.

In light of these new payment models finally becoming a reality, we asked CIO thought leaders to come together for a day to discuss their challenges and strategies for success in this new paradigm. What they had to say was both predictable and surprising.

Tools for Value-Based Care

We turned our attention to tools for value-based care. Analytics, reducing variation, care management and transitions of care, cost control and patient engagement are critical components of any value-based care program. First up was analytics.


We asked, “How is your health system utilizing analytics to change provider, staff and patient behavior”? Right away we ran into challenges.

All of the health systems represented are among the leaders in healthcare analytics development. Ken Lawonn notes that Sharp has had a data warehouse for a long time. They also use the Advisory Board’s Crimson tool. Using these tools they have started to look at provider performance. The Crimson tool was implemented on the inpatient side but they found that physicians often didn’t bother to look at their performance. Adoption is a little better on the ambulatory side as the internal data warehouse is being used to identify gaps in care, but because it is not integrated into the provider workflow there is still limited adoption.

Jim Veline, Avera, agrees. “We had a third-party vendor analytics tool and had the same experience. We spent a lot of money and effort to get it rolled out and nobody used it. If operations doesn’t own it they won’t buy in and use it. We have now created our own scorecards based on what analytics the operations team wants to see with a home grown solution.” He goes on to say, “There is a sexiness about predictive analytics right now. But at the provider level there is less pragmatic value.” Avera is focusing primarily on development of registries. Bruce Smith, Advocate Health Care, agrees. “We had a similar experience. It goes back to the user. We are still in an era of doing things to physicians. From a physician’s perspective what you are giving me is going to slow me down and you are not giving me what I do want. We deploy more and more technology and doctors are less and less happy.” Brent Snyder, Adventist Health System, notes that his organization is working hard to provide user-friendly tools so users have access to data that is relevant for them.

At Spectrum Health, notes Patrick O’Hare, they are now transitioning compensation for employed providers to focus on value. He notes it will be interesting to see if this change in compensation plans will change physician behavior to be more focused on trying to fill gaps in care.

As for what the role of IT is related to analytics, answers were mixed. Pat Skarulis at Memorial Sloan Kettering Cancer Center notes, “It’s important to have users be owners.

We have a very well developed warehouse that we have been building for 30 years. We have had a big payoff from having 140 super-users mostly on the operational side, using them for analytics. We have data scientists as part of the centralized group but finance and strategy and innovation also have brilliant analytics people.” Kyle Johnson also notes that Eastern Maine has a hybrid model. “Some of the roles live in IT as shared services and some are distributed in operational areas but use common tools.” She goes on to say, “In the ideal world we would have folks both in operations and IT understand the source of data, but in reality folks in operations may not have deep technical expertise. So both groups need to work together.”

Ken Lawonn notes that Sharp also has a hybrid model. There are members of the analytics team in Quality, Health Plan, Medical Groups, Finance and other areas reporting operationally, but infrastructure, data governance and master data management functions report to him. At Spectrum, analytics is a collection of resources that lives in IT, operations and the health plan, says Patrick O’Hare. Half of analytics is reporting through him but the other half is now moving to reporting more to operations including the Chief Actuarial Officer and Chief Medical Officer.

Clinical Variation

Next we turned our focus to minimizing clinical variation. We asked, “How far along is your health system in reducing clinical variation and creating clinical standards and care pathways and how has IT been involved in doing that?”

Bruce Smith says that Advocate Physician Partners is working on clinical improvement programs. “We have 300 pay-for-performance metrics. At end of the year if physicians hit metric targets they get paid out.” Advocate has seen improvement in clinical process. “People who were unwilling to do things in a standard way previously are now willing to do it because we see results. We are bending physician behavior.” Jim Veline notes that Avera is developing service lines for care. IT is involved in developing documentation templates and order sets which is helping to move along reduction of clinical variation. Their order sets are evidence-based, but he notes, “Sometimes there is justifiable variation in clinical care so we have to build that variation into order sets as well.”

At Mountain States Health Alliance, notes Paul Merrywell, it has been tough to get consensus around best practices for building order sets. His team is being frequently asked to modify order sets to accommodate doctors. “That has implications for data because it creates an outlier. We have no rules about number of exceptions either.” They are now measuring clinical effectiveness down to the physician to try to combat this.

Pat Skarulis notes that Memorial Sloan Kettering has standardized all order sets. Disease teams meet together to discuss and change order sets, then everyone is required to use them. Order sets are reviewed every six months. It took a long time to get to that point. “We did it on an ambulatory basis first then inpatient. But it took years to develop these order sets.” They also have the advantage of having a fully employed medical staff.

Challenges related to reduction of clinical variation abound however. Says Jim Veline, “The condition of patients when they are discharged is all over the map, but depending on the location our algorithms may not have the same implications. We are trying to standardize care but resources in each community are not the same. Registries, predictive analytics and care pathways may not address all clinical variation.”

Bruce Smith notes that Advocate’s medical group has grown from 300 three years ago to more than 1,500 now. “We need structures to make decisions about standardizing care,” he notes.

“Memorial Sloan Kettering has physician panels making decisions for the whole organization and that has been successful,” said Pat Skarulis. “For the rest of us the question is can you find courageous physicians who will step up and defend order sets as well as openness. The CMIO position is one of the toughest positions around. Our structures don’t support the role, so the CMIO is still more of an influencer. Until we have physician decision making structures in place getting consensus will remain very difficult.”

Patrick O’Hare notes that at Spectrum he is having to back up and have conversations based on business variation especially around governance. His is a big organization with both large facilities and critical access hospitals, all with their own medical staff bylaws. There is not just clinical variation but business variation as well which is causing challenges. One of the opportunities they are having is around process improvement. The health system has incentivized leaders to participate in process improvement but has not incentivized them to drive standardization and best practices across the organization. Paul Merrywell agrees. “That is exactly our problem. We have a big initiative around performance improvement, the problem is that it is disconnected. For instance, we may have an effort in one emergency department to correct a problem. Then we do the same thing in another hospital three months later and come up with a different process. We need to develop a best practice, document it and then spread it across the organization.”

Why are for-profits able to care for patients more effectively, or at least at a lower cost? Says Paul Merrywell, “For-profits, have a much more business approach to technology. There has to be a clearly defined return on investment (ROI) before you take on a project.” In fact most for-profits do not start an IT project without a clearly defined internal rate of return. They are typically a closed environment, and commonly will develop a standard product and roll it out across the organization. Jim Veline notes, however, that departments or service lines can get very skilled at developing ROI to sell their project, even if the ROI is not really there. They are struggling with how as an organization to get more disciplined about that process. Kyle Johnson notes that in a previous role her organization had a value-management program. “All they did was chase down and prove out the ROI and then it got put into budgets. They got punitive and didn’t let people do new projects if they were not a good steward of resources.”

Care Management/Transitions of Care

We next turned our attention to the areas of managing populations and managing costs. Among hot topics in this area were discussions around care management and transitions of care as well as cost-control strategies. Again issues around governance and standardization were a theme.

“At Mountain States,” says Paul Merrywell, “we struggle with care coordination primarily because of clinical variation. We are trying to come up with a standard approach to care coordination and the post-acute care visit. Right now we are focused on trying to understand how it is being done in other locations. But from an IT perspective we are asked to make changes every day that do not support decreasing clinical variation.”

Jim Veline reports that Avera has about 90 RN patient-care coordinators. “The problem we have is in understanding where they belong. Right now we have 30 in primary care, 30 in the health plan and the others are scattered around. So care coordinators have different agendas. There is no one owner in the health system and each area has different goals. We are struggling with that organizational chart now. We want to have one standard of coordinated care and to understand where it best belongs and the skill sets that we need.”

At Sharp most care coordination is within primary care, and they have matured into advanced care coordination. There are also a few service lines that have some care coordinators. “But the tools they use are really kind of crude and not integrated into the ambulatory EMR,” says Ken Lawonn. “They do a good job but it is really not very scalable. Because of that we are only managing high-cost chronic conditions right now. We are looking at what tools we are going to use across the organization from a system perspective. We need to get to common ground on how our organization does care coordination.”

Pat Skarulis views care coordination software as sitting on top of the EHR, making the EHR essentially middleware. She sees this software as a way to house care pathways for what should happen pre and post-hospitalization. Their project is in its early stages. At Spectrum IS created “The Magic Screen” for care managers, a single screen that displays information from eight different systems that care managers have to access. There has been a direct ROI as the screen has improved care-manager productivity. Spectrum is, however, hoping to replace their home-grown solution with core Epic functionality eventually because care-manager documentation still has to be done in one or more systems.

Sharing and aggregating data from disparate sources was also a key topic. Challenges abound here as well. A brand-new study from KLAS finds “Only 6 percent of healthcare providers report that information accessed from exchange partners on a different EHR is delivered in an effective way that facilitates improvement to patient care.” According to the framework from KLAS, in order for interoperability efforts to hit a “Home Run,” information from outside providers who are using a different-vendor EHR must be readily available, easy to locate, accessible within the clinician workflow and “delivered in an effective way that facilitates improvement in patient care.” In the KLAS study, almost three-quarters of providers surveyed didn’t even make it to “First Base” (reliable availability of information from outside providers using a different EHR). (Interoperability 2016: From a Clinician View-Frustrating Reality or Hopeful Future, KLAS Research) This study comes on the heels of another study indicating that 20 percent of all hospitals still don’t exchange even basic information electronically with any providers outside of their organization. (Interoperability Among US Non-federal Acute Care Hospitals in 2015, ONC Data Brief, May 2016).

The CIOs agreed they are having to focus on high-priority use cases and solving tangible business problems as they try to connect to external sources. As for health information exchanges (HIEs), they question whether HIEs as we know them will survive, given the many challenges. Patrick O’Hare notes that Spectrum actively participates in an HIE in the state of Michigan. “Within the state of Michigan we are trying to do patient attribution at the state level. All Admission, Discharge and Transfer data (ADTs) in the state are going through that engine so that anybody in the state can receive the information. The problem is that without a unique patient identifier it is not effective.”

But in other areas HIEs are in heavy use. Pat Skarulis notes that in New York every hospital has to be part of the state HIE. The same is true in Maine. Kyle Johnson notes that in the state of Maine 99 percent of all providers are in the state HIE. The unique patient identifier issue was addressed when they initially started the HIE. Still, as EHR capabilities become more advanced she wonders about the viability of stand-alone HIEs. Jim Veline notes, “HIEs are suffering from schizophrenic identity. State-funded ones are in jeopardy of not surviving. We’re all pushing data there but no one is asking for it back.” In his region the HIE is trying to become more useful, for instance meeting with Medicaid to see how the data can be used to improve care.

Paul Merrywell notes that Mountain States is using APIs to alert primary care providers that a patient is being seen. “What we really want back from them is a CCDA—current meds, current problem list, allergies etc… Once the patient goes back home we want to close the event with an API that the patient has been sent home.” He agrees that HIEs are a huge aggregators of data but with the advances of interoperability between EHRs they may not survive.

Cost Control

Among the group, IT is not as deeply involved in efforts to control costs as it is in other areas. Just a few of the organizations represented had implemented specific tools to help manage costs. For instance, at Mountain States the IS team has implemented a notification system for the cost of labs. “For all of the labs in the (EHR) system we have put dollar signs in front of them and the number of days it will take to get results.” The system ranks the cost from 1 to 4 dollar signs, a familiar scale for diners and other consumers, and helps push providers to select a test that is not only appropriate but may be a lower cost, or able to be performed internally and therefore resulted sooner.

Pat Skarulis notes that they have implemented “tons of medical logic modules” at Memorial Sloan Kettering. They are using these medical logic modules to make sure patients are placed on the proper protocol. Within protocols, ordering of very high-cost items will trigger an approval process, like getting the chair of infectious disease to sign off on a very expensive antibiotic. They are also looking at technology for radiology studies to ensure the appropriate exam is ordered for the appropriate reasons.

Patient Engagement/Activation

Finally, we covered the topic of patient engagement. A recent New England Journal of Medicine Catalyst Patient Engagement survey finds that patient engagement initiatives are having an impact on quality and cost, despite the fact that “many potential approaches have yet to be fully scaled and integrated into practice.” When asked what is currently the most effective patient-engagement initiative to “increase patients’ meaningful participation in their care,” the top response was the patient portal (cited by 38 percent of respondents), followed by secure email (14 percent). However, it is worth noting that many respondents have already either implemented or have plans to implement patient-engagement initiatives involving patient-generated data, wearable devices and social media. (NEJM Catalyst Patient Engagement Survey, September 2016). All of the organizations represented at the CIO Summit already have patient portals and are actively trying to engage patients utilizing many different tools.

Kyle Johnson notes that Eastern Maine has done quite a bit of analysis around their market. “We looked at where our patients were going. What we found is that we do have some leakage out of the system but we found that more often there were challenges around using services appropriately within the health system. For instance, in some areas we didn’t have 24/7 hospitalists or ED coverage, so patients couldn’t stay in local areas and were sent to the tertiary care center instead. That is a problem because they are farther away from home and also because that facility stays 100 percent booked all the time.” These analytics will help Eastern Maine plan to take care of patients closer to home.

Mountain States is using telehealth. They have connected all hospitals emergency departments to the children’s hospital emergency department to help avoid transfers. They are also using telehealth to connect to school nurses. Another way they are trying to engage patients is to look at improving geographic proximity. For instance, Mountain States cares for a number of government employees. Very soon they will be opening a clinic specifically aimed at government employees and located very close to where many of them work.

Realities of Managing Resources

CIOs everywhere are feeling stretched and strained, with both expanding and contracting responsibilities at the same time. Challenges are many, but in addition to governance, and the need for collaboration between IT and operations, keeping IT resources current and managing demand jump to the top of the list.

Bruce Smith agrees there are a lot of challenges with IT resources staying up to date with the changes in their field, but he also notes that there is tremendous value in having employees with long-term organizational knowledge. “Long-term employees may start to get a little obsolete, but they have tremendous organizational knowledge. They also tend to be more loyal and do what it takes to get the job done.” Patrick O’Hare acknowledges the same and notes, “They are also more connected to purpose. We may not be able to compete financially for resources but we can compete if we can give them a sense of purpose.” Along these same lines, Pat Skarulis notes that every employee at Memorial Sloan Kettering goes through an orientation program geared toward mission. She also notes that they have a changing workforce. Far more IT resources are now working remotely, a big plus if you can eliminate a commute into New York City.

Jim Veline notes that his IT department is trying some different things from a management perspective. They are experimenting with a dyad approach. Managers in his department were all promoted because they had job specific skills. “Now that they are managers we are inundating them with paperwork. We are trying to carve that piece of management out to the administrative dyad. Now with dyad managers one person is doing administrative work and the other has strong clinical or financial skills.” So far it is working well.


It seems clear that CIO challenges related to value-based care are about anything but the IT tools themselves. Sure, interoperability is a challenge, but that is one they are working through using a variety of different approaches. Instead, the biggest challenges are about governance, systemization and demand management.

If IT is to continue to provide the support that operations needs to be successful in a value-based payment environment, some things will simply have to change. Perhaps that means that nonprofits will in some ways need to begin to operate far more like for-profits. At a minimum it means that healthcare organizations will need to rapidly develop systems out of federated states in order to be able to reduce clinical variation and reduce costs. It means that IT can no longer be relegated to the basement but rather needs to be integrated into every operational area, with very close collaboration between IT and operational leadership. It means that governance groups need to be expeditiously developed to make decisions about how care will best be delivered in the organization and to inform build of supportive tools like order sets and clinical decision support within EHRs. It means that operations will need to make decisions about the priority of each of their requests in the face of resource constraints. And, finally, it means that in the near term CIOs, among their many other job requirements, will need to become expert educators and influencers to help the operational team understand exactly why all of this needs to happen.

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CMS: 93% of Clinicians Get Positive Payment Adjustments for MIPS Year 1

November 8, 2018
by Rajiv Leventhal, Managing Editor
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Ninety-three percent of MIPS (Merit-based Incentive Payment System)-eligible clinicians received a positive payment adjustment for their performance in 2017, and 95 percent overall avoided a negative payment adjustment, according to a CMS (Centers for Medicare & Medicaid Services) announcement today.

The first year of MIPS under MACRA’s Quality Payment Program (QPP) was dubbed by CMS as a “pick your pace year,” which essentially enabled clinicians to avoid payment penalties as long as they submitted at least the minimum amount of quality data. As such, in its announcement, CMS did admit that the overall performance threshold for MIPS was established at a relatively low level of three points, and the availability of “pick your pace” provided participation flexibility through three reporting options for clinicians: “test”, partial year, or full-year reporting.

CMS said that 93 percent of MIPS-eligible clinicians received a positive payment adjustment for their performance in 2017, and 95 percent overall avoided a negative payment adjustment. CMS specifically calculated that approximately 1.06 million MIPS-eligible clinicians in total will receive a MIPS payment adjustment, either positive, neutral, or negative. The payment adjustments for the 2017 program year get reflected in 2019.

Breaking down the 93 percent of participants that received a positive payment adjustment last year, 71 percent earned a positive payment adjustment and an adjustment for exceptional performance, while 22 percent earned a positive payment adjustment only. Meanwhile, just 5 percent of MIPS-eligible clinicians received a negative payment adjustment, and 2 percent received a neutral adjustment (no increase or decrease).

Of the total population, just over one million MIPS-eligible clinicians reported data as either an individual, as a part of a group, or through an Alternative Payment Model (APM), and received a neutral payment adjustment or better. Additionally, under the Advanced APM track, just more than 99,000 eligible clinicians earned Qualifying APM Participant (QP) status, according to the CMS data.

CMS Administrator Seema Verma noted on the first pick-your-pace year of the QPP, “This measured approach allowed more clinicians to successfully participate, which led to many clinicians exceeding the performance threshold and a wider distribution of positive payment adjustments. We expect that the gradual increases in the performance thresholds in future program years will create an evolving distribution of payment adjustments for high performing clinicians who continue to invest in improving quality and outcomes for beneficiaries.”

For 2018, the second year of the QPP, CMS raised the stakes for those participating clinicians. And in the third year of the program, set to start in January 2019, a final rule was just published with year three requirements. Undoubtedly, as time passes, eligible clinicians will be asked for greater participation at higher levels. At the same time, CMS continues to exempt certain clinicians who don’t meet a low-volume Medicare threshold.

Earlier this year, CMS said that 91 percent of all MIPS-eligible clinicians participated in the first year of the QPP, exceeding the agency’s internal goal.

What’s more, from a scoring perspective in 2017, the overall national mean score for MIPS-eligible clinicians was 74.01 points, and the national median was 88.97 points, on a 0 to 100 scale. Further breaking down the mean and median:

  • Clinicians participating in MIPS as individuals or groups (and not through an APM) received a mean score of 65.71 points and a median score of 83.04 points
  • Clinicians participating in MIPS through an APM received a mean score of 87.64 points and a median score of 91.67 points

Additionally, clinicians in small and rural practices who were not in APMs and who chose to participate in MIPS also performed well, CMS noted. On average, MIPS eligible clinicians in rural practices earned a mean score of 63.08 points, while clinicians in small practices received a mean score of 43.46 points.

Said Verma, “While we understand that challenges remain for clinicians in small practices, these results suggest that these clinicians and those in rural practices can successfully participate in the program. With these mean scores, clinicians in small and rural practices would still receive a neutral or positive payment adjustment for the 2017, 2018, and 2019 performance years due to the relatively modest performance thresholds that we have established. We will also continue to directly support these clinicians now and in future years of the program.”

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HHS Secretary Azar: HHS Is Planning New Mandatory Bundled Payment Models

November 8, 2018
by Heather Landi, Associate Editor
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The Centers for Medicare & Medicaid Services (CMS) is revisiting mandatory bundled payment models, possibly for radiation oncology and cardiac care, according to Health and Human Services Secretary Alex Azar, which signals a strong about-face in the Trump Administration’s policy about bundled payment initiatives.

HHS is reexamining the role that mandatory bundled payment models can play in the transition to value-based care, Azar said in a keynote speech at the Patient-Centered Primary Care Collaborative Conference on Thursday. HHS published Azar’s comments.

In the published remarks, Azar said the Trump Administration is revisiting mandatory bundled payments and exploring new voluntary bundled payments as part of the Administration’s goal of paying for outcomes, rather than process.

“We need results, American patients need change, and when we need mandatory models to deliver it, mandatory models are going to see a comeback,” Azar said.

In his speech, Azar said, “Imagine a system where physicians and other providers only had to worry about the outcome, rather than worrying about their staffing ratios and the individual reimbursements for every procedure they do and every drug they prescribe. That kind of payment system would radically reorient power in our healthcare system—away from the federal government and back to those closest to the patient.”

He continued, “One way we can do that is through bundling payments, rather than paying for every individual service. This is an area where you have already seen testing from CMMI for several years now—and I want to let you know today that you are going to see a lot more such ideas in the future.”

Azar highlighted the Bundled Payments for Care Improvement (BPCI), which, he said, has shown significant savings in several common inpatient episodes, including joint replacement and pneumonia.

During his speech on Thursday, Azar said, “I want to share with all of you for the first time today: We intend to revisit some of the episodic cardiac models that we pulled back, and are actively exploring new and improved episode-based models in other areas, including radiation oncology. We’re also actively looking at ways to build on the lessons and successes of the Comprehensive Care for Joint Replacement model.

“We’re not going to stop there: We will use all avenues available to us—including mandatory and voluntary episode-based payment models,” he said.

One industry group, the American Society for Radiation Oncology (ASTRO), already has voiced concerns about a mandatory payment model. In a statement issued Thursday afternoon, Laura Thevenot, CEO of ASTRO, made it clear that the organizaiton strongly supports a radiation oncology alternative payment model (RO-APM). "ASTRO has worked for many years to craft a viable payment model that would stabilize payments, drive adherence to nationally-recognized clinical guidelines and improve patient care. ASTRO believes its proposed RO-APM will allow radiation oncologists to participate fully in the transition to value-based care that both improves cancer outcomes and reduces costs."

Thevenot said ASTRO has aggressively pursued adoption of this proposed model with the Center for Medicare and Medicaid Innovation (CMMI). However, Thevenot said the group has concerns "about the possibility of launching a model that requires mandatory participation from all radiation oncology practices at the outset."

Further, Thevenot said any radiation oncology payment model will represent "a significant departure from the status quo." "Care must be taken to protect access to treatments for all radiation oncology patients and not disadvantage certain types of practices, particularly given the very high fixed costs of running a radiation oncology clinic," Thevenot stated.

Back in January, CMS announced the launch of the voluntary BPCI Advanced model, noting that it “builds on the earlier success of bundled payment models and is an important step in the move away from fee-for-service and towards paying for value.” The BPCI Advanced model includes more than 1,000 participants that are receiving episode-based payments for over 30 clinical areas, Azar said.

“BPCI Advanced is a voluntary model, where potential participants can select whether they want to join. But we’re not going to stick to voluntary models. Real experimentation with episodic bundles requires a willingness to try mandatory models. We know they are the most effective way to know whether these bundles can successfully save money and improve quality,” Azar said.

The Obama Administration introduced mandatory bundled payment for care for heart attacks and for cardiac bypass surgery in July 2016.

In the past, CMS Administrator Seema Verma has said that she does not support making bundled payments mandatory, and former HHS Secretary Tom Price, M.D. had strongly opposed mandatory bundles, going so far as to direct the end of two mandatory bundled payment programs—one existing and one previously announced. In November 2017, CMS finalized a rule, proposed in August 2017, that cancelled mandatory hip fracture and cardiac bundled payment models.

As per that final rule, CMS also scaled back the Comprehensive Care for Joint Replacement Model (CJR), specifically reducing the number of mandatory geographic areas participating in CJR from 67 areas to 34 areas. And, in an effort to address the unique needs of rural providers, the federal agency also made participation voluntary for all low-volume and rural hospitals participating in the model in all 67 geographic areas.

On Thursday, Azar acknowledged that his statements signaled HHS was reversing course on its previous stance, noting that last year the administration reduced the size of the CJR model and pulled back the other episode payment models, including those on cardiac care, before they could launch.

Azar, who was confirmed as HHS Secretary earlier this year, signaled early on that he diverged from Verma and Price on his views about mandatory bundled payments. During a Senate Finance Committee hearing in January on his nomination for HHS Secretary, he said, on the topic of CMMI [the Center for Medicare and Medicaid Innovation] pilot programs, “I believe that we need to be able to test hypotheses, and if we have to test a hypothesis, I want to be a reliable partner, I want to be collaborative in doing this, I want to be transparent, and follow appropriate procedures; but if to test a hypothesis there around changing our healthcare system, it needs to be mandatory there as opposed to voluntary, then so be it.”

During his speech Thursday, Azar pointed to the Administration’s first mandatory model, which was unveiled two weeks ago, called the International Pricing Index (IPI) Model for payments for Part B drugs. Azar said the model is a “mandatory model that will help address the inequity between what the U.S. and other countries pay for many costly drugs.”

Further, Azar said CMMI also will launch new primary care payment models before the end of the year, with the aim of introducing a spectrum of risk for primary care providers, Azar said.

“Before the end of this year, you will see new payment models coming forth from CMMI that will give primary care physicians more flexibility in how they care for their patients, while offering them significant rewards for successfully keeping them healthy and out of the hospital,” he said.

“Different sizes and types of practices can take on different levels of risk. As many of you know, even smaller practices want to be, and can be, compensated based on their patients’ outcomes,” he said. “We want to incentivize that, with a spectrum of flexibility, too: The more risk you are willing to take on, the less we’re going to micromanage your work.”

Azar also noted HHS’ efforts to examine impediments to care coordination, such as examining the Stark Law, the Anti-Kickback Statute, HIPAA, and 42 CFR Part 2. CMS has already launched and concluded a request for information on the Stark Law, and the Office of the Inspector General has done the same on the Anti-Kickback Statute, he noted.

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Dr. Sanjay Gupta’s Heartening Speech at CHIME18 Should Inspire U.S. Healthcare Leaders

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The story of an Amazonian tribe could serve as a motivational lesson for U.S. healthcare stakeholders

It was inspiring to hear Sanjay Gupta, M.D., the well-known neurosurgeon and medical reporter, give the closing keynote at the College of Healthcare Information Management Executives (CHIME) 2018 Fall CIO Forum in San Diego last week. Dr. Gupta, who serves as associate chief of the neurosurgery service at Grady Memorial Hospital in Atlanta, while also best known as CNN's multiple Emmy Award-winning chief medical correspondent, discussed the fascinating balance that he strikes between medicine and media.

“Oftentimes, I see people at their best, and sometimes at their worst. I get to travel the world, where I learn so much, but also teach others. Sometimes the dance between medicine and media can be awkward and emotionally challenging. But almost always, the stories we do have a significant impact,” Gupta told the Fall CIO Forum attendees.

What was perhaps most captivating about Gupta’s speech was when he spoke about visiting a primitive Amazonian tribe that appears to have the best heart health in the world. The Tsimane people of Bolivia do not speak a language, live a simple existence, and are disease-free, explained Gupta. So he went to visit the tribe with the goal to understand its lifestyle and what led to its members having such healthy hearts.  

Sanjay Gupta, M.D.

“I went spearfishing with one [tribe member], who thought he was 84-years-old, but he really didn’t know for sure. His shirt was off, and he was ripped, balancing himself on the canoe, just looking at the water, spearing fish. His eyesight was perfect. The entire indigenous tribe was just like this,” Gupta recalled.

After examining the Tsimane tribe’s diet, Gupta noted it was a hunter-gatherer society, meaning there was nothing technological. “The most mechanical thing I saw was a pulley for the well,” he said. Seventy percent of what they eat is carbohydrates—unrefined and unprocessed—while 15 percent of their diet is protein, and 15 percent fat, he added. “You need farmed food because oftentimes you don’t have successful hunting days, so the farmed food was the food in the bank. And they would do intermitting fasting, too. These are the people with the healthiest hearts in the world,” Gupta exclaimed.

When it comes to activity, when hunters are hunting, they’re never outrunning their prey, but rather outlasting it, noted Gupta. “We found that they walked about 17,000 steps per day. But they didn’t run; they only walked. They are active, but not intensively active. They also hardly every sit—they are either lying or standing all the time. And they would get nine hours of sleep per night, waking up to the rooster’s crow. There are no devices. Again, these are the people who have the healthiest hearts in world. They don’t have a healthcare system and don’t spend a dollar on healthcare,” Gupta stated.

What’s even more interesting about this tribe is that each of its members lives with some degree of a parasitic infection, which they usually get it early in life, have a few days of illness, and then just live with these parasites in their bodies for their entire lives. “The belief is that so much of the disease we talk about—that leads to this $3.3 trillion price tag [the total cost of U.S. healthcare spending in 2016]—is actually ignited or worsened by our immune systems. So the parasitic infections could be part of the reason they are protected from all types of diseases,” Gupta offered.

Essentially, it’s living this basic, undeveloped life that “inadvertently provides them extraordinary protection against heart disease,” noted a report in HealthDay last year. “Thanks to their unique lifestyle, most Tsimane [members] have arteries unclogged by the cholesterol plaques that drastically increase the risk of heart attack and stroke in modern Americans,” Gregory Thomas, M.D., medical director of the Memorial Care Heart & Vascular Institute at Long Beach Memorial, in California, said in that report.

Tsimane tribe (source: University of New Mexico)

You might be asking what the story of the Tsimane tribe has to do with U.S. healthcare since its lifestyle would obviously never be replicated in a developed country. And while that is true, it’s tough to ignore the $1 billion per day that our healthcare system spends on heart disease—compared to the Tsimane tribe that doesn’t spend a single dime, yet has the healthiest hearts in the world.

In this sense, perhaps we can use the Tsimane story to push ourselves to develop a greater understanding of why we spend so much money on healthcare and don’t have the results to show for it. Gupta asked this $3.3 trillion-dollar question in his speech—why does healthcare in the U.S. cost so much and what do we get in return?

“If you look at the statistics, it’s not impressive. More people die from preventable disease in the U.S. than in 12 other nations. People live longer in 30 other countries compared to the U.S.—including places like Chile and Costa Rica. We still have tens of millions of people who don’t have access, and we still spend all this money on healthcare. Why?” he asked.

Gupta explained that the nation’s high healthcare costs come down to the following: high administrative costs, technology, new drugs and development, and the cost of chronic disease—the last which is incredibly self-inflicted. About 70 to 80 percent of chronic disease is self-preventable, he said.

Indeed, as most of us know, about 5 percent of the U.S. population accounts for 50 percent of the healthcare costs. These are folks who are defined by illness, not by health, Gupta stated. This is why the modern-day healthcare system has proactively taken to targeting that 5 percent to improve their chances of preventing disease and staying healthy. “Data shows that home visits, nutritional counseling, one-on-one coaching, and diligent follow-up care can go a long way in preventing someone from getting sick in the first place, and from turning a disease into something more chronic. Some of these interventions can actually reverse disease. The die is not cast,” Gupta said.

For me, Gupta’s keynote highlighted the need for efforts around value-based care, care management, and population health to be intensified. A big part of that, as noted in the speech, is addressing patients’ social and environmental factors. It’s not at all surprising to see studies such as this one from earlier this year, conducted by researchers at the University of South Florida (USF) College of Public Health, Tampa, and WellCare Health Plans, and published in Population Health Management, which found that healthcare spending is substantially reduced when people are successfully connected to social services that address social barriers, or social determinants of health, such as secure housing, medical transportation, healthy food programs, and utility and financial assistance.

And with that, there is also an enormous opportunity for data and IT to play a role. Information sharing, so that providers have access to the right information at the point of care—no matter where the patient is—will be critical to reducing unnecessary costs. As will the robust use of data analytics, so that patient care organizations can be proactive in predicting which patients are at highest risk, when they might need services, and how to intervene at the appropriate time.

But to this point, Gupta, who noted that our society can get too caught up in high-tech, also suggested that “medicine seems to play by slightly different rules when it comes to innovation as opposed to other sectors. Sometimes, innovation moves painstakingly slow in respect to medicine.” At the end of the day, he said, it will be “the innovations that make us, [as a society], healthier, happier, and connect us in frictionless ways, that will be the biggest winners.”

So, will the U.S. population suddenly turn off their iPhone alarms, wake up to the rooster’s crow, and become a hunter-gatherer society? No, I would say that’s quite unlikely to happen. But hearing stories such as the one of the Tsimane tribe might just serve as good enough motivation to bring down the astronomical and unsustainable costs of U.S. healthcare.

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